I found an interesting article on Rolling Stone talking about CD pricing and Walmart. Essentially, the record lables want to keep the price of CD’s while Walmart is trying to use its leverage to reduce the price of CD’s to end users. While not formally, threatening anyone, Walmart accounts for 20% (!) of the CD market and so any label who does not participate risks losing a massive distribution channel. As part of the article Rolling Stone shows where the typical $15.99 price goes when an album is sold. It is a good read to understand the record industry.
One question that comes to mind is what is the future of CD’s? As more and more content is being purchased from the Internet, what does it mean for CD’s? Personally, I can’t remember the last time I purchased a CD and I imagine that many other people have similar experiences. As the popularity of the medium declines, I believe that price reductions is one of the only way to extend its relevancy.